Stumbled across this "essay" some guy wrote about the videogame industry/market.

Worth a read

Clicky

As the genre matures, the game mechanics become more standardized and the needs of the genre addicts more homogenized. As the market segment consolidates and standardizes,..
...
Nintendo makes the majority of their money by leveraging their brand recognition during the early to mid-stages of a genre’s life cycle...

Got buzzwords? Jesus!

I'm as good at pulling s*** out of my arse to write a report as the next uni student, but I'm finding this 'essay' hard to read. Might read later when my mind is more open. Cheers for the link.

seemed to all make sense to me, he doesn't really summarize but I guess he's saying it's very difficult to challange the existing genre kings, so don't try, your best bet is to innovate and create genres on nintendo's platforms?

Good article. Very interesting and made sense.

He stresses the point of balance. Without constant innovation (courtesy of Nintendo), Genre Kings trample over everyone else and the whole industry suffers. Genre Kings are polished and well made games and they make a stupid amount of money, but they become rigid in gameplay design and stagnate over time and they cost a lot to produce. Innovative 1st gen genre games don't sell as well as Genre Kings, but they are still profitable due to lower production costs and next to no competition in their genre.

Nintendo's strategy is to forge ahead and create new 'verbs' or methods to play games. Since they create these verbs, they get to create games first and sell them in a market with little to no competition. This innovation though also helps competitors as they will eventually catch on and release more polished 2nd+ gen games in these new genres. They will probably sell more units than 1st gen, but they will be in a market with more competition, thus production costs will be greater and profitability lower.

The article and following comments also explore Nintendo's branding strategy in comparison with Sony's and Microsoft's. And a whole host of other related issues. It's a nice read and a little enlightening, but nothing groundbreaking. It has been happening for years now.

It seems that if you want to be at the cutting edge of game design, go Nintendo. If you're a game designer with innovative ideas instead of rehashes, pursue developing for Nintendo hardware. If you're more for big budget highly polished games in well established genres, go Sony or Microsoft. If you're a new developer trying to release a game within a well established genre, forget about it because you'll most likely be trampled.

But in the end, it's all good for gamers because of this balance. Without Nintendo, the industry would stagnate and be locked into rigid game design. Without the rest, we wouldn't get big budget highly polished games such as GTA:SA and the latest Final Fantasy.

Thanks treeoflife, your post was one of the more informative I have read in a while. And thanks to original poster as well.

As he mentions, this is not just confined to the game market. Virtually all manufacturing works this way.

Some companies invest significantly in R&D, creating a new product. Because the idea behind the product is new, growing market volume is difficult, but still profitable because of the high margins allowed by limited competition. This strategy tends to work best for companies that have significant financial and intellectual resources (think Japanese companies).

Other companies invest in building better versions of existing products. Because these new versions must capture marketshare from the existing versions, they must be more feature rich and usable than the existing products. That drives production costs up. At the same time, to capture market share, they must be as cheap or cheaper than the existing product, which drives the price down. Together these factors put a real squeeze on the margin, but the product can still be profitable. This is because launching an existing technology into a pre-existing market for that technology will invariably lead to very high volumes. Obviously this strategy works far better for companies that have many significant opportunities to cut costs (think chinese companies).

The USA is an interesting case because, historically, most of it's manufacturing companies have fallen into the second group. However the many years of economic growth have widened the gap between USA and many poorer countries, which has slowly erroded their opportunities to cut costs (when compared with the cost cutting opportunities enjoyed by chinese or indonesian companies for example). At the same time, this economic growth has created a vast pool of wealth and expertise, making the USA nearly the perfect environment for innovative companies (just think of silicon valley).

Unfortunately, they have failed to adapt, and now their manufacturing sector is dying the death of a thousand cuts (as are the futures of many millions of low level manufacturing workers in the USA).

Agreed completely. It happens in a lot of other areas and industries.

What I am personally concerned about is that games are still not widely considered as a legitimate medium for serious artistic expression. I'm not just talking visuals and architecture but thematically artistic. An exploration of the human condition. Political and philosophical musings. Bold statements. Mature Themes

Sure there are some here and there, usually smaller Flash games created by sole developers, but damn I'm sick and tired of having no gaming option. Such games are real gems when they come along and nearly anyone, gamer or non gamer, realises the medium's potential for artistic expression.

But as it is, it doesn't seem likely. Such games wouldn't sell, wouldn't appeal to 99% of current gamers, etc. etc. etc. My hope is that the Revolution gives smaller companies an excuse to incorporate more serious and mature themes into their games and not just provide them with a few more ways to interact. That it provides new companies a chance to start anew with a fresh, invigorated and somewhat open-minded demographic.

People keep mentioning that their parents and friends, normally adverse to gaming, would be willing to at least try the Revolution due to their new controller design. Fingers crossed that these new players stay and that developers are brave (and probably foolish) enough to tackle the serious game stigma.

I would love to see a Citizen Kane, or a Breathless, or an American Beauty, or even a freakin Shawshank Redemption. And no I don't mean film adaptations.

Wishful thinking...?

Wishful thinking...?

Yes and no. You may well get those games from time to time, hell some of them may even be on the PS3 considering the amount of games they have on line-up. However you'll most probably be your own worst enemy as you will eventually get bored of the game as you would any other. Closest I have seen in recent times to the game you may or may not be looking after is Fahrenheit, advertised on the forums earlier this month. However it may just be wishful thinking. Linky here.

Got buzzwords? Jesus!

try doing a marketing degree, you can read a 5 page case study then realise you havent actually taken in a single word :\

Yea I have been onto Fahrenheit/Indigo Prophecy. Will definately be purchasing it when I can. Leap of faith...

I agree with boredom eventuating, but it's not really the issue. It's not really about how long a game lasts, but rather its content and what it was designed to express and invoke. Tapping into emotions and what not, normally absent with games.